Most notes in circulation are already dollar bills and the government is importing new coins which have the same weight and value as US cents but an Ecuadorian design.

But some people still regard dollarisation as an affront to national sovereignty.

A wave of protests over the move contributed to the overthrow of President Jamil Mahuad's government last January.

False remedy

A short-lived civilian military junta was taken over by senior
military officers who quickly installed vice president Gustavo Noboa, a 63-year old law professor, as president.

Mr Noboa, Ecuador's fifth president in three years, vowed to maintain his predecessor's policies.

Correspondents say he has succeeded in bringing a semblance of stability to the nation.

Advocates of the changeover to dollars say it can put developing
economies on a fast track toward stability and economic growth. Some US economists believe other Latin American countries should follow Ecuador's example.

On Thursday, the IMF praised the changeover, saying: "Dollarisation ... has proceeded rapidly (and) has calmed the financial markets."

Detractors, however, say that it is a false remedy that attacks
the symptoms, but not the root of economic problems.

The new currency is just one of many sectors where reforms have
been ushered in.

Under a $2bn, three-year agreement with the IMF, Ecuador drastically cut petrol subsidies earlier this year.

The IMF said however that the government in Quito needs to impose a tight fiscal policy "for the foreseeable future," to reduce the public sector deficit, which stood at 7% of gross domestic product in 1999.